Tenants have never had it so tough, with the latest Domain Rental Report finding that house rents are at record highs across the combined capitals and all cities, and vacancy rates in Sydney and Melbourne have hit all-time lows.
There’s little relief in sight for those looking for an apartment as a cheaper option, either. Unit rents are also at record highs in all cities with the exceptions of Canberra and Darwin.
“Australia’s rental market remains firmly locked in favour of landlords as rising demand and low supply create challenging conditions for potential tenants in 2023,” said Domain chief of research and economics Dr Nicola Powell.
“This is driven by demand for rentals that have seen no signs of stopping, fuelled by the influx of overseas migrants, international students and temporary visa holders.”
So, what kind of strategies can renters use to find cheaper places to live? We asked Australia’s experts for their best tips.
1. Consider a more affordable location
This could mean shifting one or two suburbs away, out of town, or even to a cheaper city.
“We’re finding a lot of people are moving out of town to somewhere probably less convenient, but more affordable,” said Emily Sim, the chief executive of property management with the Ray White Group. “It might be a 10 to 15-minute drive away, but that could be a big saving. We’re seeing this happen all over.
“Or, people could consider moving cities, to one that’s cheaper than the one they’re in, or to one with a higher number of vacancies, like Canberra, for instance, although rentals are very expensive there. If you can work remotely, then changing cities could be an even better idea.”
The latest Domain Rental Report reveals the cheapest cities to currently rent houses in are Melbourne ($500 a week), Adelaide ($520), Hobart and Perth (both $550) and Brisbane ($560). The most expensive are Canberra ($690), Sydney ($660), and Darwin ($650).
Within cities, renters can also research “bridesmaid” suburbs that play second fiddle to the more fashionable areas. “It’s a good idea to broaden your search in that way,” said Ben Pretty, co-founder of rental review website RentRabbit.
Tenants can look in areas where competition won’t be as fierce, such as suburbs with a lot of rental properties on the market, or where prices haven’t increased as much, such as Sydney’s outer west, the NSW Central Coast, or Melbourne’s north-eastern and north-western suburbs.
Outside of the capitals, prices have remained flat over the past year for units on the NSW mid-north coast, while units in Geelong and Bendigo and houses in Ballarat only experienced small annual median price rises.
2. Re-adjust your expectations
You might be after a four-bedroom house, but your family could easily fit into a three or two-bedroom home. You might want a free-standing house, but a semi, terrace or apartment could suit your lifestyle too. “Consider downsizing to a smaller property,” advises Patrick Bush, the national head of property management at agency Different.
But make sure you’ve researched how much they might cost and if it’d be sensible to switch, says Pretty. “Be careful as people tend to assume a unit will rent out for less than a house, but not always,” he said. “We have two-bedroom apartments in Sydney’s Mascot renting for $1200 a week now, and sometimes a house could be cheaper.”
The latest Domain Rental Report report found the median rent for the combined capitals for units is now $550 a week, while houses were only slightly more at $565.
Also, check for hidden costs with new apartments, like embedded networks for electricity and gas, for instance, that usually lead to higher prices. In addition, lots of amenities, such as pools and gyms, can inflate rents hugely. Choose smaller blocks with fewer facilities.
3. Get ahead of the competition
When you find a rental property you’re interested in, it’s important to turn up in person at property inspections, and preferably at the very first one.
“You have to be alert to new properties coming onto the rental market as a lot rent out after that very first inspection,” said Steve Fitzsimon, director business growth at Melbourne Real Estate. “Some people might roll up to a third inspection and are then surprised when it goes the next day to one of the first applicants.”
Make sure you have all your relevant documents in order, and submit your application as soon as possible. Pretty says in such a competitive market, if an agent has to chase you for missing information, the property is likely to go to someone else. That means ID, proof of income, renting history and references.
Also, make sure you’ve briefed your referees that they might be called on by the agent. “Many times, we’ll phone a referee and they’ll say they can’t release the information without the tenant’s permission, which delays the whole process,” said Fitzsimon. “And if you maybe don’t have a job at that moment, write a covering letter explaining your situation and why it won’t make a difference.”
4. Put your best foot forward
Fitzsimon has lost count of the times he’s seen people turning up at tenancy inspections looking like they’ve just rolled out of bed.
“Presentation matters!” he said. “If you’re applying for a property, then you have to put your best foot forward. You have to look clean, tidy and reasonably well-dressed. First impressions count.”
5. Get to know your local agents
Call around all the local agents to make yourself known – just in case. “It’s always good to be on their lists, and most will have a mailing list,” Bush said.
Also, ring agents you’ve rented from before, and who know you have a good reputation, to see if they might have something coming up, Pretty recommends.
6. Think laterally
Don’t be afraid to try new things, either, says Sim. “If there’s a large property that two families could comfortably live in, with separate living areas, why not get together with another family and rent it together?” she said. “That would often be cheaper than two smaller houses.”
Consider looking at any build-to-rent properties that may be coming up, which offer security of tenure and usually only rent increases in line with inflation.
There are also an increasing number of co-living buildings around that offer small studios to live in, but generous shared spaces like gourmet kitchens, games rooms and common lounges. These are often much cheaper than regular rentals.
Article source: Queensland Property Investor